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Ethiopia: Government Tackles Challenges in Vertical Coffee Trading Platform

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The Ethiopian government is addressing concerns within the coffee industry, urging suppliers and exporters to uphold their obligations on the vertical trading platform. This platform, designed to connect farmers and suppliers directly with exporters, has faced issues impacting both farmers and national export targets.

Adugna Debela, Director General of the Ethiopian Coffee and Tea Authority (ECTA), highlighted a lack of trust and transparency among some traders. Practices like credit trading and defaults were found to be hindering the success of the scheme. Notably, some suppliers were accused of selling green beans to multiple exporters while receiving advance payments from each, a violation of established guidelines.

These practices have caused significant losses for farmers and suppliers, with some reporting individuals disappearing without settling payments. Agriculture Minister Girma Amente emphasized the importance of fair treatment for coffee producers, Ethiopia's key agricultural commodity.

The vertical integration scheme, launched in 2018/19 as an alternative to the Ethiopian Commodity Exchange, has seen significant growth. In recent years, it has handled the majority of coffee exports. However, despite revenue targets for coffee exports, challenges remain in maintaining export volumes.

The Ethiopian government's efforts to address these issues aim to ensure a more transparent and fair trading environment for all stakeholders within the coffee industry. By fostering trust and adherence to regulations, the vertical trading platform can continue to play a vital role in supporting Ethiopian coffee farmers, suppliers, and the national economy.

Source: Capital Ethiopia